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Satisfying the equity

This page contains details of two cases: Jennings v Rice (2003); and Powell v Benney.

Basic principle

Jennings v Rice
[2002] EWCA 159

Facts

C worked for many years for an elderly lady for nothing on a promise that "he would be alright" and "this will all be yours one day". On the full facts the judge found that there was an estoppel and awarded him £200,000 based on the cost of care. He refused to award the full value of the house and furniture (£435,000) because he thought that would be excessive. C appealed.

Decision

In dismissing the appeal the CA discussed the principles to be applied when deciding how to satisfy the equity. In particular, the principle of proportionality applies. The end result must be a just one having regard to the assumption made by the party asserting the estoppel and the detriment which he has experience.
    "The essence of the doctrine of proprietary estoppel is to do what is necessary to avoid an unconscionable result, and a disproportionate remedy cannot be the right way of going about that". (Robert Walker J, para 56)

Remedial discretion

Bargain and non-bargain cases

Powell v Benney
[2007] EWCA Civ 1283

Summary

In exercising its discretion in this case, where the claimants alleged a constructive trust, the court ordered the return of the money expended by them rather than an interest in the property.

Facts

1992: The Claimants (C's) befriend the deceased (when he was alive!). He owns two properties.
1993: C's look after the deceased and take care of his day to day affairs. Deceased says he will leave his properties to the C's
1994: Deceased offers C's the use of his properties. They were untidy and run-down and Claimants had to de-clutter them.
2000: Deceased writes out a note saying that he is leaving his properties to Claimants. They do some further work to the properties
2003: Deceased dies. C's invite his personal representative to transfer the properties to them, but after taking legal advice she refuses
2004: C's commence legal proceedings claiming that the properties were held in trust for them by way of constructive trust/proprietary estoppel.

First instance

The trial judge considered Yaxley v Gotts [2000] Ch 162; Gillet v Holt [2001] Ch 210 and Jennings v Rice (above)and considered that not only was detriment an essential ingredient of proprietary estoppel but that there had to be a causal link between the assurance relied on and the detriment asserted and that the detriment alleged must be pleaded and proved. On the facts he considered that to receive the two properties worth £280,000 was out of all proportion to the detriment the Claimants had suffered, and that justice would be done if the Claimants were recompensed £20,000 to reflect the monies they expended and the time they spent in the properties. The Claimants appealed.

Held on appeal

The judge had clearly rejected the constructive trust claim, and had not misdirected himself on detriment. Although it was not particularly clear how he had arrived at the figure of £20,000, the Court would not interfere.

The case principally involved the scope of the remedial discretion in proprietary estoppel. In Jennings v Rice it was noted that Robert Walker LJ had divided the range of possible situations into two classes:
    (1) the bargain category, in which the relief should vindicate the claimant�s expectation, and
    (2) the non-bargain category, in which relief is arrived at by the exercise of a wider judgmental discretion, influenced by a number of factors including the claimant's expectation, but also proportionality with his detriment.
Here, insofar as it was contended that the claim fell within the bargain category, it required that the claimant's expectations and the element of detriment be defined with reasonable clarity. That was not the case. There was no bargain or consensual arrangement and the deceased did not require the Claimants to do the detrimental acts upon which they now rely. That was a matter for them.

Comment

In short, what this case serves to highlight is the nexus between assurance and detriment where the claimant's case turns on bargain. If the claimant expects the relief to vindicate his bargain he will need to prove expectation and detriment. Otherwise, he will be left to the general discretion of the court in finding the minimum equity to do justice.


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